Blogs

Chat with us

Romania – Employer of Record

EWS helps you to hire an international workforce quickly and compliantly, without setting up a legal entity locally. If you’d like to get in touch about our employer of record solution in Romania, click here

Country Introduction – Romania

Capital –                      Bucharest
Currency –                  Romanian Leu (RON)
Population –                19.29 Million
GDP –                          $248.7 Billion USD
Language –                 Romanian
Major Religions –        Christianity (Orthodox)

Romania is situated in southeastern Europe. Romania was occupied by Soviet troops in 1944 and became a satellite of the U.S.S.R.in 1948. The country was under communist rule from 1948 until 1989, when the regime of Romanian leader Nicolae Ceausescu was overthrown. Free elections were held in 1990. In 2004 the country joined NATO, and in 2007 it became a member of the EU.

The Parliament Palace in Romania’s capital of Bucharest is the second largest building in the world, behind only the Pentagon. The building is 84m high. It is also the heaviest building in the world

Romania is home to four Nobel Prize laureates: George Emil Palade (medicine), Elie Wiesel (peace), Herta Müller (literature) and Stefan Hell (chemistry). The first ever perfect 10 awarded in the Olympic Games went to Romanian gymnast Nadia Comaneci for her performance on the uneven bars in Montreal, Canada in 1976.

The Romanian language is 1,700 years old.

Contract of Employment

Employment contracts in Romania must be executed in writing and registered with the Employees General Register. Employment contracts must be in local language and local currency. The contract must stipulate all aspects of employment such as; the start date, salary, bonuses, holidays, overtime policy, termination and severance.

Fixed term contracts are allowed in Romania, however cannot be extended past 18 months.

Probation Period

Up to a maximum of 6 months.

Termination

Notice period in Romania is 20 working days for non-managerial positions.

For managerial positions the notice period is 45 working days.

Working Hours

40 hours per week, Monday to Friday.

Employers must keep a log of the daily working hours of an employee, highlighting the start time and the end time. This information is required by the Labour Inspection Control.

Overtime

An employee is only allowed to work a maximum of 48 hours per week inclusive of overtime.

Overtime can be compensated either with time off in lieu or paid to the time can be paid at 1.75x the salary rate. If the employee is being compensated with time off for the overtime worked, then this must be compensated with 60 calendar days from the day the employee performed overtime.

Annual Leave

Annual leave is 20 days per year. For employees who have joined the company after the start of the year the annual leave is calculated on a pro-rated basis.

Sick leave

Employees are entitled to 180 days of sick leave with an additional 90 days being granted depending on the category of illness. The first 5 sick days are paid by the employer at full salary rate. From day 6 onwards the employee is paid by FUNASS (National Health insurance Fund). The employee will be paid at between 75% to 100% of their average monthly income over the last 6 months.

Maternity and Paternity Leave

Maternity leave is 126 days in Romania. A minimum of 63 days must be taken before the due date and the remaining days, 63, must be taken after giving birth. The days off are stipulated by the pregnant employees physician. Maternity leave is paid by FUNASS at the rate of 85% of the average monthly salary over the previous 6 months.

Paternity leave is up to 10 days which can be taken at any time over the birth period. This can increase to 15 days if the employee has completed an infant care course.

VAT / GST:

The VAT rate is 19%

Income Tax

The income tax in Romania is a flat 10% regardless of earnings.

Employer/Employee Contributions

Total employer cost is 6.25%. This is broken down as follows:

4.00% – Social Security/Pension Contribution
2.25% – Unemployment Insurance

The employee contribution is 35%. This is broken down as follows:

10.00% – Health Insurance
25.00% – Pension

Public Holidays

There are 15 paid public holidays in Romania.

Severance Pay

There is no statutory severance pay in Romania, unless set out in the employment agreement.

Work and Residence Permits (Expatriates)

Romania is part of the EU and such the work and residency rules of the EU apply. Citizens from EU countries can apply for a 90 days stay by applying for a registration certificate from the Romanian Immigration Office.

Non-EU/foreigners must apply for work authorisation from the Romanian Immigration Office via the local employer. Employers need to prove they have tried to hire a Romanian national before applying for work authorisation for a non-EU/foreign employee.

Work permits are valid for 1 year and can be extended.

EWS can help employees obtain the relevant right to work and live in Romania.

Interested in global expansion? click here

  • share on Facebook
  • share on Twitter
  • share on LinkedIn

Related Blogs